France: Drop in softwood prices confirmed

July 03, 2012

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Fordaq: RW

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The downward trend in standing softwood timber prices, which began in the autumn of 2011, has now fully set in in France. It comes with reduced demand (less bids and less bidders in public and private tenders), and with higher rates of unsold inventories than last year. As much as 35% of the wood which was auctioned on 16 June by the National Forest Office in Méaudre (department of Isère), for instance, remained unsold.

In the Vosges and the Jura mountains, the amounts of unsold stock were similar last May and June (up to 40% of the stock listed in the auction catalogues). Demand is still there, albeit lower than in 2011, but sawmillers believe sellers deliberately overprice in order to artificially curb the drop in prices. “Unsold lots are withdrawn at unreasonable prices”, Jean-Claude Sève, vice-president of the French woodworking federation, pointed out indignantly at the end of an auction in Levier (Doubs department) on 21 June. At that auction, prices for standing fir of all diameters were down 18% over a year. Fir timber is now around 10 euros less per cubic metre underbark (m3 ub) than spruce.

Spruce is also affected by the decrease in price: 1.5-2-m3 roundwood pieces, which used to be negotiated at 70-72 euros/m3 in June 2011, are only worth 57-60 euros/m3 now. According to product category and spruce dimensions, the year-on-year decline in prices varies between 15% and 18%. Many sawmillers complain that, “whilst the building season should be in full swing, order books fill up only one or two weeks in advance”. Given the tensions caused by falling prices on sawn wood markets, French sawmillers are looking to keep their small profit margin by adjusting the raw material purchase price.